The International Financial Corporation (IFC), a member of the World
Bank Group, will provide a $100 million risk-sharing facility to the
Industrial Bank to support green loans in China.
Yesterday’s deal is the second phase of the IFC’s energy efficiency
financing program with the Industrial Bank , which will help the
Fujian-based bank extend 1.5 billion yuan ($209.79 million) in green loans to
cut five million tons of carbon dioxide emissions a year. That’s the
equivalent of closing 10 100-MW coal-fired power plants in China.
“The IFC will bear a certain portion of losses for all the loans within
the energy efficiency financing portfolio,” Jyrki Koskelo, the IFC’s
vice-president for Africa, global financial markets and funds, said.
“The program offers a package of technical assistance on market research,
project development and equipment financing services to its partners.”
“By establishing partnership and cooperation with the IFC, we now
evaluate the project more by cash flow rather than traditional collateral
value,” Li Renjie, president of Industrial Bank, said. “We will enhance
risk analysis to guarantee the success of the project.”
“Due to a lack of assets to serve as collateral, we have experienced a
lot of frustration when we try to finance a project,” Yu Yuanqi,
chairman of Shenzhen Phascon Technologies, said. The company is working on a
landfill gas recovery and power generation project. “The Industrial
Bank didn’t look just at our assets as collateral, but helped us to get
the capital and grasp the opportunity at a critical time in our company’s
development.”
The IFC and Industrial Bank teamed up on the first phase of the program
in 2006.
The IFC initially provided a risk-sharing facility of up to $25 million
for the Industrial Bank’s green loans. The bank has since financed 46
energy-efficiency and emissions-reduction projects with a total loan
value of 900 million yuan.
The majority of these loans are to small and medium-sized enterprises
that are implementing energy-efficiency projects such as industrial
boiler retrofitting, wasted heat recovery, co- and tri-generation projects
for district heating, power saving and optimization of industrial
energy use.
By Zhang Qi